Wednesday, July 24, 2024

 Tips Before Investing in Blockchain Start-Ups

Tips Before Investing in Blockchain Start Ups

Cryptocurrency is in the news daily now. Even though the market has taken a hit recently, the technology behind Bitcoin and other cryptos can still be a good investment. Blockchain technology can change the way we interact with each other digitally. There’s no doubt there is a place for it in the future. Take note of these tips before investing in blockchain start-ups. 

Why Should You Invest in Blockchain 

Blockchains are used to store sensitive information that is shared during a transaction. This can include medical records, biotechnology, voting records, traditional banking, international shipping, agriculture, and of course cryptocurrency. There are many other potential uses for the technology as well. However, before investing in blockchain start-ups, consider these tips. 

Know the Purpose of the Blockchain Project

Startups can’t simply treat blockchain like a gadget. A true blockchain startup will have the technology built into the heart of all its main processes and projects. If it doesn’t, you aren’t truly investing in blockchain at all. At that point, you’re just investing in a startup, which isn’t necessarily a bad thing. But that’s a different discussion for a different time. 

Educate Yourself About the Type of Blockchain the Start-Up Deals With 

There are three types of blockchain: public, hybrid, and private. Before investing in blockchain start-ups, you need to know which type the company deals with. Hybrid and private blockchains are the most popular because of the security they offer. Get to know everything you can about the type of blockchain itself.

Get Tangible Proof the Company Can Reach Its Vision

Anyone investing in a start-up knows that you need to get proof that the company can reach its overall vision. They should be able to provide a plan for how they will become profitable. The technology behind the company should also be easily explained by the company founders. To analyze what your potential return on investment might be, calculate the cost of several years of the service before and after blockchain. 

Profile the Talent on the Start-Up’s Team 

Smart investors will also meet with the core team at the blockchain start-up and gauge the talent available. Does the company have blockchain engineers? These individuals are still a rare find in today’s talent market. Companies equipped with engineers are more likely to succeed. You’ll also want to know if the company has a lawyer on retainer and data analysts on staff. 

Where to Find Blockchain Start-Ups to Invest In

The blockchain and cryptocurrency space is extremely competitive. By the time you hear about an up-and-coming start-up, it may be too late to start investing. Luckily, there are plenty of options for savvy investors out there. 

Equity crowdfunding platforms allow investors to purchase early equity in start-ups. Platforms like Wefunder and StartEngine provide buy-in options as low as $100. That makes investing in blockchain start-ups for folks like you and me fairly obtainable. So, with the above tips in mind, let us know what blockchain start-ups you’re thinking about investing in!

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  • Drew Blankenship is a cryptocurrency investor, family man, father and lifelong automotive enthusiast. He lives in North Carolina with his wife, daughter and their dog Enzo.

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